2 ways of looking at ticket scalping

People reselling seats at inflated prices are part of the scenery at concerts and sporting events. Is it 'pure capitalism,' or is it a crime?

By Bruce Kennedy Apr 9, 2013 8:40AM

Image: Crowd at concert © Briony Campbell/Lifesize/Getty ImagesBad karma, dude. That's what one University of Oregon professor says ticket scalpers are accumulating by scooping up tickets to the Dalai Lama's scheduled appearance at the school next month and selling them online for more than 10 times the original price of $20.


Despite the amazing cynicism involved in trying to make a buck off a religious leader (and a winner of the Nobel Peace Prize to boot), scalping -- the reselling of legally purchased tickets for often more than their original face value -- is just part of the scenery at most major sporting and entertainment events.


The publication Entertainment and Sports Lawyer estimates the "secondary ticket market" is a $5 billion business with a growth rate of about 12%. Myles Kaufman at the ticket search engine SeatGeek found 29 states have laws regarding the resale of tickets. But only a handful, he says, have outright bans or strong regulations. And those laws are often hard to enforce.


Efforts to get a Fairness in Ticketing Act passed in Tennessee's legislature failed last week. Several big venues supported the bill, which would have required ticket brokers to register with state authorities and disclose both the original price and seat number of tickets.


"It's upsetting to see what people pay, double or triple, for ticket prices, Tennessee Theatre general manager Tom Bugg told WBIR-TV. "And there's no recourse for them when they figure it out."


But according to TicketNews.com, the Tennessee measure was doomed by opposition from consumer advocates, property rights activists, event-goers -- and groups like the Fan Freedom Project. The group bills itself as a grassroots organization. It received initial funding, however, from StubHub, the online ticket marketplace that's a division of eBay (EBAY).


According to Fan Freedom, one of the main issues it has against anti-scalping laws is ticket transferability. "When fans buy tickets, we own them," the organization's website says. "We have the right to buy, give away or sell our tickets however we choose, anytime we choose, in any way we choose, at any price we choose."


In the meantime, Entertainment and Sports Lawyer says Stubhub and companies like industry giant Ticketmaster -- which merged in 2010 with Live Nation to form Live Nation Entertainment (LYV) -- "have stepped up their efforts in statehouses across the nation and inside the Beltway as part of an effort to align the laws with their respective interests."


And not everyone considers scalping a bad thing. Jim Caple at ESPN.com calls it "capitalism at its purest level."


"An event is sold out, you need a ticket and the scalper provides you one at a mutually agreed upon price," he wrote several years back. "You don't need to be Louis Rukeyser to understand the remarkable efficiency of this market."


More on moneyNOW

71Comments
Apr 9, 2013 12:46PM
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The problem isn't the reselling of tickets, it's the onslaught of automated purchasing attacks that buy up all the seats before a fan can get their credit card info entered onto a venue website. You solve that by making the first 48 hours of ticket sales at the venue box office only. An onerous tax on any profits over the face value of a ticket would work too.
Apr 9, 2013 12:38PM
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If people stopped buying tickets from scalpers, the scalpers would soon be out of business.  Think about it.
Apr 9, 2013 12:48PM
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In Arizona you can't get a ticket to an event. The ticket scalpers pay people to stand in line and buy all the tickets up. There is no tickets available to the general public and the politicians won't do anything about. It seems like they want the public to be scalped here...
Apr 9, 2013 12:55PM
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  If you have ever tried to get tickets at the retail price online you know that it is pretty much impossible as the scalpers use 10-50 computers with 10-20 browsers open on each to to scarf up all the good seats. If you eventually get through to the ticket site you are lucky if there is any left even in the nosebleed section. I agree that free enterprise is a good thing but these scumbag brokers don't play fair using so much tech and people like me on a fixed income can't afford to pay 5x to 10x face value. At this point I can only wish I could see some of my favorite performers in person because the scapled prices are out of my reach.  
Apr 9, 2013 12:57PM
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So the business to be in is to buy up every ticket for a popular event and then resell them at inflated prices. Sounds like a reasonable business model and fair too. You just might be the lucky person to be 5th in line waiting for tickets but the 4th person buys them all. What a deal!

 

I understand if you buy a pair of tickets for a concert but your wife goes into labor before the show and you want to get your investment back; ticket price, time spent waiting in line etc. But to be able to purchase large blocks of tickets and thus bring on a "sold out" condition prematurely for the sole purpose of resale at profit is inherently unfair to those who deserve the chance to buy at face value.

Apr 9, 2013 12:53PM
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I am actually against scalping. As a sports fan it's hard to find any tickets that aren't ridiculously marked up. And there is no way to get them from the stadium/venue itself because they are already sold out. That's not supply and demand that's profiteering. And it's sad but that IS the 'American way'...
Apr 9, 2013 1:01PM
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Ticket scalping should be illegal and enforced. This is a parasitic industry that includes large companies like Live Nation Entertainment and small scale local street level scalpers. They are all guilty of changing the price of live entertainment and often times increasing the price so much that the event becomes too expensive for the very people the event is staged for.

Apr 9, 2013 1:13PM
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"An event is sold out, you need a ticket and the scalper provides you one at a mutually agreed upon price,"

The event might not be sold out if the scalpers hadn't bought the tickets!
Apr 9, 2013 12:55PM
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I love that if you are registered with the state as a 'broker' you can rob people blind...but if I did it, it's illegal. Once again, if the states make money off it, it's all good.  They don't care what you do, as long as they get a cut of the money.
Apr 9, 2013 1:13PM
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According to Fan Freedom, one of the main issues it has against anti-scalping laws is ticket transferability. "When fans buy tickets, we own them,"

I don't have a problem with fans buying tickets then reselling them if they want, I do have a problem with corporations buying up all the supply of tickets to an event with the sole purpose of reselling them at an outrageous markup.  Supply and demand should not be fueled by companies cornering the market by buying all the tickets before the fans get a chance to buy them.
Apr 9, 2013 1:12PM
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when the supply is artificially controlled by broker mass purchases it is no longer a "free" market.

It is similar to "cornering" the market on a commodity, it's illegal and should be.

Apr 9, 2013 1:02PM
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I can live without a ticket - regulate drug costs
Apr 9, 2013 1:05PM
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When scalpers don't record the income on their taxes, it becomes illegal.

The secondary market can lead to fraud, people paying for tickets that aren't legit, which is a bad thing.

I know in NJ/NY, scalping is illegal but a ticket agency can charge whatever they want and stubhub and other similar websites advertise all the time.
So if you pay $100 for a bleacher seat at Yankee stadium from a ticket agency and try to sell that ticket with a face value of $20 outside the stadium for $100, you can be arrested for scalping.

Apr 9, 2013 12:47PM
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i always get tickets from the scalpers - you just gotta wait until the show is JUST starting or wait until after the openers or kick off whatever. We get them for a steal! Football games 12 rows up from field - $40, concert tickets right near stage - $35 .... just gotta know how they work!
Apr 9, 2013 1:15PM
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Ticket scalpers'???????   U must me ticket master, ticket tron , stub hub and the rest of them that buy preretail sales of large block of tickets and not only drive up the prices but also take up premium seats and sell that at huge mark ups . I recently looked up tickets for the final four and found prices exceeding 10k dollars. And this article has the audacity to question street scalpers.
Apr 9, 2013 1:00PM
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Just one way of looking at Scalping.....scumbuckets, avaricious heathens. Why do ya think it's called Scalping Tonto!!??
Apr 9, 2013 1:16PM
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It's only a crime if the government can't get a piece of the action.
Apr 9, 2013 1:28PM
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What is the difference really all year long you support your team but why is it the price goes up as soon as they make the playoffs? Now only the elite can attend, I ask why did the price go up because there is the demand and somebody will pay it.

Why is scalping illegal at all, likely because the venue isn't getting their cut, and Uncle Sam isn't getting their cut; its about supply and demand but more about who gets paid from your sale.

If I bought a car and it was a super popular car and I turn around an sell it for a profit. Is BMW going to come after me for scalping my car...why is the entertainment industry different.

Apr 9, 2013 1:11PM
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Don't buy the tickets from scalpers they will go broke fast and good riddance.
Apr 9, 2013 1:38PM
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IM also getting tired of tv and radio stations buying up all the first two rows and giving them to people that dont even show up.
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